Business Application Services Trends in the EMEAI Region - A PAC Study, Sponsored by Fujitsu

1. © PAC 2016
Business Application Services Trends in the
EMEAI Region
A PAC Study, Sponsored by Fujitsu
January 2017

2. © PAC
Background to the Study
22016
This presentation provides a summary of the key findings of the most comprehensive ever study of future
directions in applications services at organisations in the EMEAI (Europe, Middle East, Africa and India)
region.
The study was conducted by leading independent research firm Pierre Audoin Consultants (PAC) and
sponsored by Fujitsu, and is based on interviews with more than 500 senior IT and business decision
makers at large commercial and public sector organisations.
The survey focuses on key technology challenges that businesses are facing as they undertake digital
transformations: future SAP and Oracle investment trends and strategies, how to transform legacy
technology infrastructure and how to optimize productivity.
An in-depth analysis of the full results of the study will be provided through a series of free-to-attend
webinars hosted by PAC and Fujitsu. Please register for the sessions at the links below:
Mastering Productivity – register here
Oracle Cloud Application Strategies – register here
Overcoming the Legacy Barriers – register here
The Path to S/4 HANA – register here

3. © PAC
Sample Breakdown
32016
658 survey respondents
in EMEIA region
50% business
respondents
50% IT
respondents
UK
Survey conducted in
Nov 2016
All respondents had
over 500 employees
Manufacturing 19%
DACH FIN
>
18%
14% 14%
ES
Oct Nov Dec Jan Feb17%
4%5%
UAESE
Services 18%
Retail 13%
Healthcare 8%
Tel & Med 8%
7%
Banking 7%
Public
Insurance 6%
Automotive 5%
Utilities 5%
Transport 4%
IRE
24%
1%
IN IT
3%

4. © PAC
Key Findings
42016
44%
plan to migrate more
than half their apps to
the cloud in next 3 years
14%
Claim to be at an
advanced stage in
productivity monitoring
38%
Of SAP users plan to
start rolling out S4 Hana
in next 12 months
43%
of SAP users see
complexity of existing as
stumbling block to S4
39%
of Oracle users will start
implementing Oracle
cloud in next 12 months
48%
see internal skills as a
blocking point for Oracle
cloud migration
11%
of European businesses
claim to be digital
leaders
57%
see legacy technology
as a barrier to digital
transformation
30%
believe that more than
50% of their applications
are future-proof

5. © PAC 52016
Digital Transformation

6. © PAC
Digital Transformation (1/2)
62016
Q. What does digital transformation mean to
your organisation?
Q. How would you rate your organisation’s
current status in terms of digital transformation?
Digital transformation is not at the absolute
top of the agenda of the participants in the
study. Other challenges – economic etc –
are taking precedence.
This looks a realistic appraisal of where
organisations are on digital transformation
– just 11% see themselves as leaders.
1%
10%
17%
30%
42%
I don't know yet - its rather
confusing
It is all just hype - it will have no
impact on our business
It is a matter of life and death for
our business today
it will become a matter of life and
death in the next three years
It will have an impact - but we
have bigger challenges to worry
about
9%
11%
38%
42%
We do not have a digital strategy
in place
We are a digital leader
In its early stages - we are
currently planning our digital
strategy
We are a digital follower

7. © PAC
Digital Transformation (2/2)
72016
Q. What do you see as the biggest challenges
to your organisation’s digital transformation
strategy?
28%
36%
39%
48%
55%
56%
57%
Finding the right partners
Lack of investment in innovation
Lack of effective collaboration
between business and IT
Recruiting the right skills
Integrating digital into legacy
systems
Diving cultural change within the
IT organisation
Ageing technology and
infrastructure
Q. Do your current business applications enable
you to take advantage of innovative new
technology such as IoT, robotics, AI etc?
30%
70%
No
Yes
Interesting to see technology and cultural
challenges factors topping the list. This is
why digital success can only be achieved
by business + IT working hand in hand.
This is a surprisingly high level and sounds
like over-confidence, particularly considering
the previous answer. It may indicate the lack
of initiatives that many orgs are still at an
early stage on these new topics.

8. © PAC 82016
Application Transformation

9. © PAC
Applications Transformation (1/4)
92016
Q. What percentage of your current business
applications landscape would you describe as
being fit and able to support the future digital
strategy of your business?
Q. Which of the following impacts do your
legacy applications have on your organisation?
Only 30% of participants believe that more
than half of their applications are future-
proof. This is a low level, but probably a
realistic appraisal.
6%
24%
36%
27%
7%
75-100%
50-74%
25-49%
10-24%
0-9%
37%
46%
54%
56%
57%
Barrier to the growth of the
business
Drain on internal skills
Making us less competitive
Drain on budget that could
support innovation
Making us less agile
Interesting to see a negative impact on
agility being the main concern. This
reflects what we hear more and more in
the market about agility, rather than cost
being the main driver to new projects

10. © PAC
Applications Transformation (2/4)
102016
Q. To what extent have you migrated your
application estate towards a cloud delivery
model?
Q. How do you expect this proportion to have
changed in three years time?
5%
15%
31%
27%
22%
75-100%
50-74%
25-49%
10-24%
0-9%
14%
30%
30%
20%
6%
75-100%
50-74%
25-49%
10-24%
0-9%
…but there’s going to be a lot of
movement in the next three years, with the
level more than doubling to 44%.
Only 20% have migrated more than 50%
of their applications towards a cloud
delivery model….

11. © PAC
Applications Transformation (3/4)
112016
Q. To what extent is your organisation currently
adopting DevOps principles?
Q. To what extent are you using robotic process
automation to increase reliability, speed and
focus of external and internal base processes?
12%
11%
31%
28%
18%
DevOps is an integral part of all
software development projects
DevOps is an integral part of
individual software development
projects
DevOps is still at a pilot stage in
our company
DevOps will probably be used in
our company in a few years
We do not currently have any
plans to adopt DevOps principles
DevOps is still a work in progress at the
large majority of organisations, although
only 18% don’t currently have a strategy or
some level of adoption.
6%
21%
36%
37%
We use it on a widespread basis
across the organisation
We are currently testing it across
some of our business processes
We are planning to use it in the
next 12 months
We have not yet started to use
robotic process automation
It is a similar story with robotic process
automation, but its going to be an active
area in 2017, with a third planning to start
out with RPA in the next 12 months

12. © PAC 122016
Mastering Productivity

13. © PAC
Mastering Productivity (1/3)
132016
Q. Do you agree that digital transformation goes
beyond just technology – it requires new ways
of working as well?
Q. What statement best describes your
organisation's maturity in the provision and
adoption of employee productivity and collaboration
technology?
The participants overwhelmingly agreed
with this statement
14%
86%
No
Yes
6%
16%
33%
45%
We have a fully integrated suite of productivity
and collaboration tools, high adoption rates
amongst a workforce that makes full use of the
technology, and an ongoing programme of
We have some technology that could improve
employee collaboration and productivity but it
isn’t really used
We have a reasonably well integrated set of
productivity and collaboration tools and are
working towards maximising the benefits of the
technology
We use some productivity and collaboration
tools but the technology isn’t integrated and
adoption is inconsistent
For the large majority of respondents,
harnessing the full potential of productivity
and collaboration tools remains a work in
progress.

14. © PAC
Mastering Productivity (2/3)
142016
Q. Are you able to baseline, measure, and track
employee productivity in your organisation?
Q. Which business areas would be the highest
priority when it comes to targeting productivity
improvements?
15%
14%
31%
40%
We don't track employee
productivity
We know how productive our
employees are and have an
ongoing programme of
technology enabled productivity
We have plans in place to
introduce employee productivity
monitoring across the business
Employee productivity is known
and tracked only in the parts of
the business that need it
Only 14% claim to be at an advanced
stage – but nearly one third plan to push
ahead with productivity monitoring,
highlighting what an important topic it is.
16%
26%
29%
38%
44%
45%
48%
52%
Supply Chain
Manufacturing
HR
Finance
Sales
Operations
Marketing
Customer Service
It is interesting to see customer-facing
teams being prioritized for productivity
improvements. Are these teams perceived
to have the biggest room for improvement,
or to have the biggest impact?

15. © PAC
Mastering Productivity (3/3)
152016
Q. What metrics do you or will you use to
measure productivity in your organisation?
Q. If metrics are used, how do you track and
monitor them?
2%
2%
12%
16%
18%
23%
27%
None
Other
Return on capital
Cost per unit of output
Revenue per head
Profit per head
Hours worked per unit of output
Participants in our study track a broad
range of metrics as their primary indicators
of productivity?
6%
19%
33%
42%
We do not track any metrics
It is an automated process and
we provide the information back
to the business
We get manual feedback from
employees
It is an automated process but we
do not provide this information
back to the business
This is a missed opportunity – 42% have
automated the monitoring of productivity,
but do not provide the information back to
the business.

16. © PAC 162016
Oracle Cloud Apps

17. © PAC
Oracle Cloud Apps (1/3)
172016
Q. Do you see your Oracle platform as being
crucial to enabling your organisation's digital
transformation strategy?
Q. What is your organisation's overall planning
status for the adoption of cloud applications to
digitize back office functions such as HR, finance,
procurement and supply chain?
This is a ringing endorsement of Oracle’s
place in the digital strategy of its customer
base.
10%
90%
No
Yes
0%
11%
39%
29%
21%
We are looking at switching to an
alternative cloud provider
We do not currently have a plan
in place
We plan to start with the project in
the next 12 months
We are already in the middle of
an implementation/transformation
We have already implemented
Oracle Cloud solutions
No Oracle users in the study are looking at
switching to an alternative supplier. The
next 12 months look set a substantial level
of Oracle Cloud Apps adoption

18. © PAC
Oracle Cloud Apps (2/3)
182016
Q. What business benefits do you expect to
achieve from digitizing your back office with
Oracle Cloud Apps?
Q. Which areas of your business do you expect
to be a priority for Oracle Cloud Apps adoption?
It is interesting to see the business benefits
(better access to info, better financial control)
outweighing the more mundane technology
cost arguments (infrastructure consolidation,
avoid upgrades).
Human resources and finance are the two
areas where participants are prioritizing
Oracle Cloud Apps adoption.
6%
9%
18%
22%
22%
23%
28%
28%
32%
37%
37%
38%
Infrastructure consolidation
Avoid upgrades
Improved alignment with business
Lower TCO
Improved staff productivity
Quicker end-of-month processing
Improved talent acquisition
Improved decision making
Improved usability
Improved financial control
Real time access to information
Greater automation
2%
10%
29%
46%
50%
51%
51%
61%
None of the above
All have an equal priority
Supply chain management
Procurement
Core HR
Talent management
Finance
Learning and development

19. © PAC
Oracle Cloud Apps (3/3)
192016
Q. What do you see as the biggest challenge to
digitizing your back office with Oracle Cloud
Apps?
Q. What would help you in your decision
regarding digitizing your back office functions
using Oracle Cloud Apps?
Skills and internal know-how highlighted
as the main challenges – this underlines
the opportunity for Oracle to support.
Clients are primarily looking for more
information on the functionality and the
added value of using Oracle Cloud Apps.
6%
29%
30%
40%
46%
48%
User adoption
Lack of business case
Cost
Complexity of existing landscape
Lack of internal know-how
Limited number of internal skills to
manage migration
10%
15%
31%
34%
35%
36%
40%
Individual discovery and
evaluation workshop
References
Information about effort and cost
involved
More transparency about the
migration capability for the
Proven end-to-end methodology
(evaluate, plan, build, run)
Understanding business change
requirements
More clarity about functions and
added value

20. © PAC 202016
SAP HANA

21. © PAC
SAP S/4 HANA (1/3)
212016
Q. Do you see your SAP platform as being
crucial to enabling your organisation's digital
transformation strategy?
Q. What is your company's current planning
status regarding S4 HANA?
SAP users overwhelmingly believe that
their SAP platforms are going to continue
to play an important role in supporting their
digital agendas.
93%
7%
Yes
No
2017 looks set to be a landmark year for
S/4 HANA adoption with close to 40%
planning to start a project in the next 12
months.
3%
10%
12%
37%
38%
We are looking at switching to an
alternative technology platform
We are already in the middle of
an implementation
We do not currently have a plan
in place
We are currently testing the first
applications of SAP S/4 HANA
Basis
We plan to start the project in the
next 12 months

22. © PAC
SAP S/4 HANA (2/3)
222016
Q. Which of the following benefits do you expect
from using S/4 HANA?
Q. Which of the following best describes your
attitude to S/4 HANA migration?
It is interesting to see cost reduction listed
as one of the primary expected benefits –
does S/4 HANA need to be sold more as a
cost play rather than a way to enable to
the digital enterprise?
Surprising to see more than a quarter
expecting the project to be painless.
However the largest proportion
acknowledge that it will be a significant
undertaking.
12%
17%
32%
35%
42%
46%
58%
59%
Flexible alignment with internal
customer requirements
Personalized user interface
Creating a platform for digital
business models
Holistic real-time access to
information
Becoming ready for the Digital
Core announced by SAP
Simpler and quicker generation of
reports
Reducing running and
maintenance costs
Improving current business
processes
10%
20%
28%
42%
It will be a project with
considerable effort involved that
will require support from an
external partner
It will be a long-term project that
needs planning but can be
managed internally
It will be a problem-free project
that can be handled internally
It will be a project of medium
complexity that can be handle in
stages

23. © PAC
SAP S/4 HANA (3/3)
232016
Q. Which of the following do you perceive to be
the main challenges for starting an SAP S/4
HANA implementation?
Q. What would help you in your decision-making
regarding a S4 HANA implementation project?
Bridging the gap between the legacy SAP
estate and S/4 HANA is seen as the main
challenge. without external support.
SAP customer still need more insight into
the functionality and added value of S/4
HANA proposition
9%
19%
27%
31%
34%
37%
43%
User adoption
Lack of business case
Cost
Lack of understanding of S4 HANA
proposition
Lack of internal know-how
Limited number of internal skills to
manage migration
Complexity of existing landscape
11%
18%
24%
34%
37%
37%
39%
Individual discovery and
evaluation workshop
References
Proven end-to-end methodology
(evaluate, plan, build, run)
information about effort and cost
involved
Understanding business change
requirements
More transparency about the
migration capability
More clarity about functions and
added value

24. © PAC
Contact
Founded in 1976, Pierre Audoin Consultants (PAC) is part of CXP Group, the leading
independent European research and consulting firm for the software, IT services and
digital transformation industry.
CXP Group offers its customers comprehensive support services for the evaluation,
selection and optimization of their software solutions and for the evaluation and
selection of IT services providers, and accompanies them in optimizing their sourcing
and investment strategies. As such, CXP Group supports ICT decision makers in their
digital transformation journey.
Further, CXP Group assists software and IT services providers in optimizing their
strategies and go-to-market approaches with quantitative and qualitative analyses as
well as consulting services. Public organizations and institutions equally base the
development of their IT policies on our reports.
Capitalizing on 40 years of experience, based in 8 countries (with 17 offices
worldwide) and with 140 employees, CXP Group provides its expertise every year to
more than 1,500 ICT decision makers and the operational divisions of large
enterprises as well as mid-market companies and their providers. CXP Group consists
of three branches: Le CXP, BARC (Business Application Research Center) and Pierre
Audoin Consultants (PAC).
For more information please visit: www.pac-online.com
PAC’s latest news: www.pac-online.com/blog
Follow us on Twitter: @PAC_Consultants
2016 24
Nick Mayes
Research Director, PAC UK
+44 (0)20 7251 2810
n.mayes@pac-online.com
Got questions on the study? Contact us!